The Companies (Cross-Border Mergers) Regulations 2007

CHAPTER 8COMPLIANCE AND ENFORCEMENT

Disputes about operation of an employee participation agreement or the standard rules of employee participation

53.—(1) Where—

(a)an employee participation agreement has been agreed; or

(b)the standard rules of employee participation apply,

a complaint may be presented to the CAC by a relevant applicant who considers that the transferee company has failed to comply with the terms of the employee participation agreement or, where applicable, the standard rules of employee participation.

(2) A complaint brought under paragraph (1) must be brought within a period of 3 months commencing with the date of the alleged failure, or where the failure takes place over a period, the last day of that period.

(3) In this regulation—

“failure” includes failure by means of an act or omission,

“relevant applicant” means—

(4) Where the CAC finds the complaint well-founded it shall make a declaration to that effect and may make an order requiring the transferee company to take such steps as are necessary to comply with the terms of the employee participation agreement or, where applicable, the standard rules of employee participation.

(5) An order made under paragraph (4) shall specify—

(a)the steps which the transferee company is required to take;

(b)the date of the failure; and

(c)the period within which the order must be complied with.

(6) If the CAC makes a declaration under paragraph (4), the relevant applicant may, within the period of three months beginning with the day on which the decision is made, make an application to the Appeal Tribunal for a penalty notice to be issued.

(7) Where such an application is made, the Appeal Tribunal shall issue a written penalty notice to the transferee company requiring it to pay a penalty to the Secretary of State in respect of the failure unless satisfied, on hearing representations from the transferee company, that the failure resulted from a reason beyond its control or that it has some other reasonable excuse for its failure.

(8) Regulation 55 (penalties) shall apply in respect of a penalty notice issued under this regulation.

(9) No order of the CAC under this regulation shall have the effect of suspending or altering the effect of any act done or of any agreement made by the transferee company or merging company.

Misuse of procedures

54.—(1) If an employee representative, or where there is no such representative in relation to an employee, an employee, believes that a transferee company or merging company is misusing or intending to misuse the transferee company or the powers in these Regulations for the purpose of—

(a)depriving the employees of that merging company or the transferee company of their rights to employee participation; or

(b)withholding such rights from any of the people referred to in sub-paragraph (a),

he may make a complaint to the CAC.

(2) A complaint must be made to the CAC under paragraph (1) before the date upon which the consequences of the cross-border merger take effect (see regulation 17) or within a period of 12 months after that date.

(3) The CAC shall uphold the complaint unless the respondent proves that it did not misuse or intend to misuse the transferee company or the powers in these Regulations for either of the purposes set out in sub-paragraph (a) or (b) of paragraph (1).

(4) If the CAC finds the complaint to be well-founded it shall make a declaration to that effect and may make an order requiring the transferee company or merging company to take such action as is specified in the order to ensure that the employees referred to in paragraph (1)(a) are not deprived of their rights to employee participation or that such rights are not withheld from them; and

(5) If the CAC makes a declaration under paragraph (4), the complainant under paragraph (1) may, within the period of three months beginning with the day on which the decision is made, make an application to the Appeal Tribunal for a penalty notice to be issued.

(6) Where such an application is made, the Appeal Tribunal shall issue a written penalty notice to the transferee company or merging company requiring it to pay a penalty to the Secretary of State in respect of the failure unless satisfied, on hearing representations from the transferee company or merging company, that the failure resulted from a reason beyond its control or that it has some other reasonable excuse for its failure.

(7) The provisions in regulations 53(8) to (9) and 55 shall apply to the complaint.

Penalties

55.—(1) A penalty notice issued under regulation 53 (disputes) or 54 (misuse of procedures) shall specify—

(a)the amount of the penalty which is payable;

(b)the date before which the penalty must be paid; and

(c)the failure and period to which the penalty relates.

(2) No penalty set by the Appeal Tribunal under this regulation may exceed £75,000.

(3) When setting the amount of the penalty, the Appeal Tribunal shall take into account—

(a)the gravity of the failure;

(b)the period of time over which the failure occurred;

(c)the reason for the failure;

(d)the number of employees affected by the failure; and

(e)the number of employees employed by the undertaking.

(4) The date specified under paragraph (1)(b) above must not be earlier than the end of the period within which an appeal against a decision or order made by the CAC under regulation 53 or 54 may be made.

(5) If the specified date in a penalty notice has passed and—

(a)the period during which an appeal may be made has expired without an appeal having been made; or

(b)such an appeal has been made and determined,

the Secretary of State may recover from the transferee company or merging company, as a civil debt due to him, any amount payable under the penalty notice which remains outstanding.

(6) The making of an appeal suspends the effect of the penalty notice.

(7) Any sums received by the Secretary of State under regulation 53, 54 or this regulation shall be paid into the Consolidated Fund.

Exclusivity of remedy

56.  Where these Regulations provide for a remedy of infringement of any right by way of application or complaint to the CAC, and provide for no other remedy, no other remedy is available for infringement of that right.